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The Texaco Gasification Process in 2000Startups and Objectives

William E. PrestonTexaco Inc.

4800 Fournace PlaceBellaire, Texas 77401

Presented at theGasification Technologies Conference

October 2000San Francisco, California

Introduction

The Texaco Gasification Process (TGP) is a market leader in the conversion of heavy oils,petroleum coke, and other heavy petroleum streams, to valuable products. In the year 2000,the commercial acceptance of the technology for the production of power, hydrogen,ammonia, and other chemicals reached new heights with a record number of startups andcapacity additions.

In all, twelve new commercial TGP plants were or will be started up this year in six countries.The feedstocks for these plants include coal, petroleum coke, natural gas, and a wide varietyof low-valued heavy oil streams. The total syngas production capacity from these newprojects totals 1375 million standard cubic feet per day, increasing the total operating capacityof the TGP around the world by more than fifty percent.

The startup of these plants is significant in more ways than just numbers. With these projects,Texaco has begun the transformation from mainly a licensor of the TGP to an equity ownerand operator. Texaco committed, even with the strictly licensed projects in this group, to “actlike an owner” for the purposes of their startup. In this way, Texaco continues to find meansto accelerate the progression of project development to startup and into successful commercialoperation.

By becoming a world-class developer-owner-operator of these type projects, Texaco aims tocontinue to expand the use of the TGP as a significant part of the global energy market.

AmmoniaPower/SteamSyngasMethanolHydrogen

Fig. 1: Texaco Gasification Process syngas capacityadditions in 2000, by main product (mmscfd)

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Startups: By the Numbers

In the calendar year 2000, twelve projects using the TGP will startup. These break downgeographically as follows: In Asia, two projects are in China, and two are in Singapore. InEurope, three projects are in Italy, and one is in Germany. Three projects are in the U.S., andthe twelfth project is in Australia.

Eight of the projects are fed by some type of heavy oil, three by coal or petroleum coke, andone by natural gas. Power and steam are the main products of five of the projects. Three ofthe projects mainly produce ammonia, two produce syngas for sale to a merchant chemicalsmarket, one produces methanol and one produces hydrogen.

In all, 1375 million standard cubic feet per day (MMSCFD) of new syngas capacity will beadded to the previously operating 2100 MMSCFD capacity of TGP generated syngasworldwide. The eight new oil fed projects generate 1083 MMSCFD, or 79%, of this syngas.Solid feeds - coal or petroleum coke - generate 262 MMSCFD, or 19%. The remaining 2% isgenerated by a natural gas fed TGP unit.

Europe

North America

Australia

Asia

Fig. 2: Texaco Gasification Process syngas capacityadditions in 2000, by region

Total: 1375 mmscfd

OilCoke/CoalGas

Fig. 3: Texaco Gasification Process syngas capacityadditions in 2000, by feedstock (MMSCFD)

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Startups: By Region

Europe: The four new European TGP units that started up in 2000 are each sited in refineriesand are each fed by some type of heavy oil. Three of these four projects are large powerprojects in Italy, and the fourth produces methanol in Germany.

Italy: In the mid-1990’s, Italy imported about 16% of its power from other countries. Most ofthe internal power production in Italy was generated from 3% sulfur content fuel oil producedby Italy's domestic refiners. The European Community directed that this fuel oil must bereduced to 1% sulfur by 1998. Italian refiners would either incur major capital andoperational investments in their facilities or face having their high sulfur fuel oil change froma revenue producer to a waste product. At the same time the state run power utility, ENEL,faced major system impacts to its already undersized generation capacity.

To address these potential problems, the Italian government passed legislation to provideprice incentives for independent power production that utilized indigenous fuels. IntegratedGasification Combined Cycle (IGCC) power, based on Texaco Gasification Power Systems(TGPS), provided Italian refiners with the ideal means to utilize their high sulfur petroleumstreams to produce power in an environmentally superior way.

Texaco executed licenses for three gasification to power projects in Italy. These were with:

• ISAB S.p.A., 500 MW• API S.p.A., 250 MW• SARAS S.p.A., 500 MW

These projects are the first integrated gasification power projects to attain non-recourseproject financing. As this type financing has traditionally been an engine for independentpower production (IPP) project development, this is a significant breakthrough for thegasification to power business. Many of the aspects of the financial arrangements for theseprojects will undoubtedly serve as a model for new TGPS projects.

In September 1997, Texaco became an equity partner in API Energia, the consortium thatowns the API Project. This venture is a partnership, made up of API, Asea Brown Boveri(ABB), and Texaco. This project gasifies visbreaker residue from the API refinery inFalconara to produce steam and power. API Energia closed its project financing in November1996.

The API Energia project is fed by 1470 short tons per day (sTPD) of visbreaker bottoms. Thetwo-train gasification unit feeds an ABB GT-13E2 combustion turbine. The power plant,which also includes an Ansaldo steam turbine, produces a nominal 280 MW and steam.Despite several construction delays, the longest of which was caused by the discovery ofnumerous faulty valves, the startup has progressed to its final stages of startup and will beginits performance test run in November. Both gasifiers were running at 100% of rated capacityby mid-July, and the ABB turbine has run for extended periods at full capacity.

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The ISAB project was organized into a joint venture called ISAB Energy, made up of ISABand Mission Energy. This project gasifies 3174 sTPD of deasphalter bottoms from the ISABSicily refinery in Priolo Gargallo, Siracusa to produce a nominal 510 MW of power. TheISAB Energy venture closed its project financing in July 1996.

ISAB Energy started-up initially in late 1999. The project passed its full rate plant acceptancetest in April 2000. The project has had extended runs at full rates and has produced as muchas 525 MW during these periods. The project has met or exceeded its environmental targetsand has successfully demonstrated their two Ansaldo/Siemens V94.2 combustion turbines’operation on 100% syngas feed.

Fig. 5: ISAB; Priolo Gargallo (Siracusa), ITALY

Fig. 4: API Startup; Falconara, ITALY

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The SARAS project formed a joint venture called Sarlux, made up of SARAS and Enron.This project gasifies 3771 sTPD of visbreaker residue to produce steam, 550 MW of power,and hydrogen at the Saras refinery in Sarroch, Cagliari. Sarlux reached financial closure onits project financing in November 1996.

The project was initially started up in April 2000, but the startup was interrupted by thecollapse of a retaining wall in the refinery. Although this wall and its failure were unrelatedto the gasification facility, the wall collapse damaged piping critical to the operation of therefinery and all operations were suspended during its repair.

The gasification unit was restarted in August, and the startup has proceeded exceptionallysmoothly. By mid-September, one gasifier was in its 46th day of continuous operation, and asecond unit was in its 27th. The plant acceptance test for this unit is expected to commenceshortly. The combined cycle unit, made up of three General Electric S109EC combustionturbines and steam turbines on a single shaft, has functioned well on syngas feed.

Germany: The DEA refinery in Wesseling, Germany licensed a TGP unit fed by 600 sTPD ofheavy oil. The unit produces methanol from its syngas. The refinery has experience withgasification, having existing units based on a competing technology. The plant had its initiallight-offs in late May and early April. The startup proceeded very well with the experiencedDEA operators and has been in nearly continuous operation since early June.

Fig. 6: Sarlux Startup; Sarroch (Cagliari), ITALY

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Asia: There will be four Asian TGP startups in 2000, two each in Singapore and in thePeople’s Republic of China (PRC). Three of the four are fed by heavy oil fractions, the fourthby coal. Both Chinese plants produce ammonia. One of the Singapore projects producessyngas that is sold for chemicals production, while the other is primarily a power plant.

A fifth Asian project, at the Ningxia plant in Yin-Chuan in the PRC, is converting its TGPfeedstock from heavy oil to gas. Although this is a notable event, we have not included thiseffort as a new plant startup for the purposes of this paper.

China: The Huainan project, located in Hefei City in the PRC, utilizes 990 sTPD of coal togenerate ammonia. Its initial start-up was in August 2000. A scheduled turn-around of theentire Huainan facility took place in the latter part of August and was completed September10. Startups activities have resumed at this writing.

Fig. 8: Huainan Startup; Hefei City, P.R. CHINA

Fig. 7: DEA; Wesseling, GERMANY.

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The Nanjing project, located in the Dachang District of the PRC, is projected to begin startupactivities in November 2000. This project will gasify 850 sTPD of heavy oil to produceammonia.

Singapore: The Singapore Syngas Proprietary Ltd. (SSPL) project is a joint venture betweenTexaco and Messer Industries. The project gasifies 630 sTPD of heavy oil from the localCaltex Refinery and sells syngas to chemical producers in the area. The project started upinitially in late June, and was selling syngas product by mid-July. Both trains are currentlyrunning.

Esso Singapore plans to startup its 1019 sTPD gasification project in December 2000. Thisproject will be fed by steam cracker tar and will fuel a large on-site cogeneration project. Asmall amount of syngas will also be used for chemical production.

Australia: The BOC Group has licensed the TGP for this project that converts 15 MMSCFDof natural gas to hydrogen. This hydrogen is sold to the British Petroleum refinery inBrisbane, Australia. The project has completed its pre-commissioning and will begin itsstartup activities in early October.

Fig. 9: Singapore Syngas Proprietary Ltd.; SINGAPORE

Fig. 10: BP/BOC; Brisbane, AUSTRALIA

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North America: Three projects have been started up in North America this year, all in theU.S. All are located at a refinery or petrochemical plant. Two are fed by petroleum coke, andthe third by deasphalter bottoms. The products are varied: steam, power, ammonia, andsyngas are produced among the three facilities.

The ExxonMobil Baytown Syngas Project is located within the ExxonMobil Chemical plantin Baytown, Texas. The project is fed by 1213 sTPD of deasphalter bottoms from theadjacent ExxonMobil refinery. The project produces syngas, which is sold to an industrial gascompany that markets various syngas products throughout the region.

The Baytown project started up initially in late April 2000. The project achieved 100%design throughput by mid-June, and completed all of its guarantee tests in July. Performanceand reliability of the unit has been very good.

The Farmland Industries petrochemical plant in Coffeyville, Kansas is the site of a 1084sTPD gasification unit that produces ammonia. The project was started up initially in mid-July, 2000. Operations of the plant have progressed well, and startup activities continue thereat this writing.

Fig. 11: ExxonMobil Baytown Syngas Project; Baytown, TX, USA

Fig. 12: Farmland Startup; Coffeyville, Kansas, USA

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The Motiva Delaware City project gasifies 2300 sTPD of petroleum coke to produce about160 MW (net) and up to one million pounds per hour of steam. The gasification unit wasstarted up initially in late July and early August. The facility successfully transferred syngasto its two General Electric MS-6001FA combustion turbines in late September, and continuesits startup activities.

Startup Lessons Learned

Texaco gains a wealth of knowledge from startups and plant operations that is cycled back toexisting plants and into the project development and engineering of new projects. In this wayTexaco gains continuous improvement of its existing operations and its technology andknow-how for new projects.

In preparing for the year’s unprecedented amount of new plant startups, a conscious effortwas made to facilitate and plan for the large amount of coordination needed to acquire anddisseminate lessons learned to and from each site.

In addition, Texaco made a strategic decision to treat startups, regardless of their ownershipposition in the project, as if Texaco were an equity owner of the project rather than simply atechnology supplier. This would give projects their best opportunity for an optimal startup,would enhance Texaco’s reputation with its customers, and would give Texaco its bestopportunity to gain valuable startup and operations experience.

Some of the many practical means of accomplishing these objectives are: on all Texaco equityprojects and many key license-only projects, Texaco established pre-startup, startup, and post-

Fig. 13: DCRP; Delaware City, Delaware, USA

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startup teams. The latter planned to stay with the project well into its normal operationsperiod. Texaco also established “startup manager” positions to coordinate all of its startupactivities at a given site, and to interface with the owners’ site and off-site managers andTexaco operations, engineering, and business managers.

Texaco also established weekly conference calls for all startup personnel, on- and off-site, tocoordinate activities, discuss pressing issues, and vet lessons learned. In addition, specialconference calls are also held weekly for all personnel involved in automation and controlsystems design, installation, and operation of the plants in startup. Finally, technical bulletinsare issued to each site as needed for specific lessons learned of a more urgent or complexnature.

The Path Forward

While Texaco is proud of the growth and commercial acceptance of the TGP represented bythe year 2000 startups, we are committed to continuously improving project development andstartup cycle time and plant reliability.

Texaco has made reducing the cycle time between project conceptualization and commercialoperation a high priority. Three ways of accomplishing this are by taking equity positions inprojects, by employing innovative financing methods, and by standardizing plant designs.

Texaco remains a licenser of its gasification technology. However, Texaco is now activelyseeking opportunities to be an equity partner in many gasification projects around the world.There are at least three reasons for this.

First, Texaco believes that as an equity partner it can most effectively and rapidly influencetechnical and business decisions made on the project and thereby give the project its bestchance of success. Second, Texaco’s presence as an equity partner may improve the project’sability to be project financed. Third, as an owner Texaco realizes larger financial returns fromits gasification technology. Increased returns justify additional allocation of resources tofurther grow the business.

Texaco has a proven record of employing strategic partnering and advantageous financingmeans to facilitate project development speed and success. The TGP’s continuingcommercial acceptance is expected to result in the ability to execute non-recourse projectfinancing arrangements like those successfully arranged in the projects in Italy. Other TGPprojects have benefited from innovative recourse financing in the form of operating leasescoupled with the utilization of low interest solid waste utilization bonds.

Recently Texaco has made a strong push to standardize its plant designs, not only to improveproject development cycle time, but also to improve plant operability and reliability. Bystandardizing gasification plant modules, Texaco expects to:

• Reduce engineering time• Reduce equipment procurement time• Reduce startup time• Improve operability• Improve reliability

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Standardizing would improve engineering and procurement cycle time by avoiding the needto “re-invent the wheel” and by allowing repetitive use of equipment and layout designs. Weexpect improvements in startups and operations by systematically including lessons learnedfrom operations and maintenance activities into standard designs and by allowing operationspersonnel to have instant familiarity with TGP plants located anywhere in the world.

Texaco has also placed a high priority on increasing gasification plant reliability. Texaco hasfound that much of the annual forced outage time at TGP plants is due to required gasifierrefractory repairs, feed injector repairs, and safety shutdown system instrument failures. Mostof the planned outage time at this plant is for scheduled maintenance on the gasifier refractoryand for preventative maintenance on the quench chamber water ring.

Texaco has addressed many of these equipment reliability issues by becoming the supplier ofsome of the critical gasification equipment. This allows us to assure that the quality of theproduct is built-in and that the latest “lessons learned” of all of the Texaco licensedgasification facilities are included in the equipment design.

Equipment for which Texaco has become a supplier includes:

• Gasifier thermocouples• Quench rings• Gasifier feed injectors• Gasifier skin temperature measurement system• Gasifier refractory design, procurement, and installation• Safety startup and shutdown control systems• Critical control systems

Texaco continues to address sources of downtime for all gasification units and we haverealized significant progress in this area. For example, in the past feed injectors in solidsgasification service have been more limited in their service times compared to injectors withliquid or gaseous feeds. But now, feed injectors in coke gasification service at two plantshave operated without repair for more than 120 days and are still in very good condition.

Texaco gasification units are typically constructed to have reliability characteristicscompatible with process technologies found in refineries and chemical plants. This is trueregardless of the feedstock to the unit. We are confident that these results will be achieved inall of our installations.

ConclusionThe addition of more than 1.3 billion standard cubic feet per day of new Texaco syngascapacity at twelve sites around the world in a single year is a significant endorsement of thecommercial acceptance of the technology. Twenty different companies in diverse businesseshave ownership shares in these new projects, which utilize a wide variety of feedstocks andhave a broad product slate.

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With the existing Texaco gasification projects and projects in advanced stages ofdevelopment, commercial Texaco gasification units will soon produce more than 4.6 billionscfd of syngas worldwide.

Texaco intends to build on this experience base to enhance its position as a leader in theglobal energy business of developing, owning, and operating gasification and power projects.

Note: The author wishes to acknowledge the contributions of Mr. D. D. Neal and Mr. P. W.Thone, both of Texaco, who were instrumental in preparing this paper.